Backpackers first started coming in numbers to the Gulf of Thailand islands in the 1980s. In tie-dye T-shirts, they journeyed by coconut boat to the undiscovered beaches of Koh Samui and Koh Pha-Ngan. They stayed in 50p-a-night bamboo bungalows, watched the sunset from their hammocks, and thought they'd found nirvana.

Those Lonely Planet-clutching gap-year students are now in their late 30s and 40s and some have risen to become hedge fund managers, law partners and corporate leaders. Cash-rich, time-poor, with families in tow, what is their fantasy holiday home now?

The creators of Soneva Kiri think they have the answer. This ambitious villa development on the Thai island of Koh Kood, within sight of the Cambodian mainland, promises to recapture memories of barefoot bliss for former backpackers, combined with the comforts they have grown accustomed to in business hotels.

These are holiday homes with prices to make even a hedge fund manager choke on his pineapple. With villas weighing in at up to $7·5 million (£3.8m), they kick sand in the face of other island developments in Barbados and the Seychelles.

As one who has strung up a hammock outside many a cheap Thai beach hut, I was intrigued to see Soneva Kiri's rather more luxurious version. Residents will eschew the coconut boat in favour of a private jet which takes 45 minutes from Bangkok airport. The fourth largest island in Thailand, Koh Kood is one of the least developed, with threequarters of it cloaked in rainforest. A few small resorts are already tucked into its coves - the delightful Captain Hook bungalows are $60 a night - but any whiff of cheap luggage is kept a safe distance from the 150- acre Soneva site.

Soneva's "bamboo huts", of which three are complete so far, are vast 400sq m (4,300sq ft) private villas, crafted in eucalyptus, sustainably farmed teak, New Zealand pine and local bamboo, topped with colonialstyle white pavilions. There will be 36 private villas alongside 42 smaller resort villas. Each will have four to six bedrooms, an infinity pool and yoga sala in up to two acres of beach or hilltop land.

The cocktail of glamorous "extras" is enough to blur the senses. Expect in-villa gourmet dining, walk-in wine cellars, private steam rooms and gyms. Add to this a butler service, and $100,000 worth of interior furnishings in the style of Dr Livingstone goes to Louis Vuitton and you have the hallmarks of the Soneva brand. It was guests wanting to buy a slice of its Six Senses resorts that inspired the company's owner, Sonu Shivdasani, to step into property for the first time. He has begun in Thailand, where foreigners cannot own land but can purchase property on a lease.

It would be easy to get carried away by the proposed retail village selling everything from diamonds to Italian cheeses; the floating cinema on a reservoir where residents can drift out in Vietnamese rice baskets, drink martinis and watch films under the stars. Then there's the treetop dining room, the children's play centre shaped like a manta ray, the eco-villa and organic vegetable garden to offset any guilt about the private jet … But instead let's talk about money.

There were two words I couldn't get out of my head: bamboo huts. I share my concerns with Soneva's head of sales, Harsh Roopchand, an Old Harrovian who knows the international wealthy and is unshakably confident that he can sell wooden beach villas for $7 million plus. "In Oman," he argues, "beach villas are selling for $15 million." Money attracts money, and Soneva Kiri is nothing if not reassuringly expensive.

That said, the people at Soneva don't want the bling brigade. Really, they'd prefer a mix of nationalities: British and other northern European buyers, and restricted numbers of Middle Eastern, Indian and Russian buyers so as not to create cultural cliques. "I could go to Kazahkstan tomorrow and sell out," says Harsh, "but I won't." He says he has already turned down "unsuitable" buyers.

So is putting your millions into bamboo a wise investment? Soneva's rental scheme is attractive: in peak season, you could rent out your villa for up to $10,000 a night. Purchase prices, Harsh tells me, have risen 40 per cent since the first 20 villas were marketed in April last at $2·75 million to $4·5 million. Seven villas have sold and prices are now $4·5 million to $7·5 million. "In February/ March, prices are going up again," he says. The 16 villas in the second phase of development could fetch up to $13 million.

But will the structures themselves still look good in 10 years? Fashions for spa resorts move on. Harsh himself thinks the first luxury pool villas to come to Thailand 20 years ago are looking "a bit dated". And how will your wooden villas fare after a lashing from a tropical storm - not to mention the turbulence in the world stock markets? Only time will tell. Beautiful as the bamboo looks, there's a practical reason why people like to put their money into good old bricks and mortar.

Dhevatara, Koh Samui, Thailand Beachfront gated community of just six villas. Five or six bedrooms, infinity pool, Jacuzzi and Sala, staff quarters. From $2m, Dhevatara Properties, 0066 2654 3484, www.dhevatara.com

Four Seasons Residences, Barbados On the island's west coast, the resort will have 36 private residences, with four-six bedrooms, pools, beach access. To open in 2009. From $6m, Cinnamon 88, www.cinnamon88.com